American efforts to punish the Soviet Union through trade sanctions may hurt the U.S. economy more than that of the Soviet Union, according to a report released today by the congressional Office of Technology Assessment.
The report concluded that embargoes aimed at punishing the Soviets for actions in Afghanistan and Poland had no major impact on the Soviet economy.
The United States embargoed grain exports to the Soviet Union after the 1979 invasion of Afghanistan and barred export of oil and gas technology after the Soviets pressured Poland to curb the Solidarity trade union movement.
Rather than hurt the Soviet economy, the report said, the embargoes created rifts in the western alliance, gave the United States an image as an unreliable supplier in industrial and farm trade, caused economic damage to companies trying to trade with the Soviet Union and added to U.S. farm surpluses as the Soviets switched to other grain suppliers.
"The aftermath of U.S. attempts to embargo grain and energy equipment exports to the U.S.S.R. dramatically demonstrate the limitations on U.S. power to successfully conduct a trade leverage policy," the 106-page study said.
The report comes as Congress is debating renewal of the Export Administration Act, under which the sanctions were applied, and Reagan administration proposals to strengthen control of the flow of technology from the West to the Soviet Union.
Beyond the effects of past embargo attempts, the study found that this country's western allies place a far greater value on trade with the Soviet Union than does the United States. Therefore, the study said, efforts to force embargoes on Europeans are doomed to fail, especially if it appears that the United States is trying to force its foreign policy views on the Europeans.
Beyond the adverse political effects on U.S. relations with its allies, the report said that U.S. firms may run into increased trouble selling in western Europe because of concerns about the possible interruption of future transactions.
This "chilling effect . . . may lead to long-term adverse impacts on East-West trade, far more important to the U.S. economy than trade with the Soviet Union," the report said.
The report also questioned the impact of increased controls in preventing the Soviets from acquiring western technology to boost military might, although it said export curbs can make it more difficult and more expensive for the Soviets to do so.
The report cited intelligence testimony that the Soviets acquire 70 percent of western technology they need for militarypurposes through illegal means, and said: "It is most improbable that even drastic changes in U.S. export control policy could alter the fact that the U.S.S.R. benefits militarily from western technology."
The issue has prompted a major debate in the government between hard-liners, who feel that keeping technology from the Soviets is of paramount importance, and those who argued that U.S. security is better served by emphasizing exports to boost economic growth.
Undersecretary of Commerce Lionel H. Olmer said the administration steered a "middle path" between the two views. But President Reagan's proposals have been attacked by U.S. business interests, which found them too restrictive on trade, and by the western European allies, who complained that the proposals attempt to extend U.S. law to cover foreign-based subsidiaries of U.S. companies.
A House Foreign Affairs subcommittee eliminated the administration's most controversial proposals, but Olmer called the version under consideration by the full committee "unacceptable."